What is Bitcoin Cash?

Bitcoin Cash is also a hard-fork of Bitcoin, which means that the coin originates from the same Bitcoin blockchain. As of August 1, 2017 it is live as the "Peer-to-Peer Electronic Cash", which strives for lower transaction fees and reliable confirmations.

Bitcoin Cash is very similar to Bitcoin, but it has some technical differences that enable it to become more usable as a means for everyday payments.

For example, the blocksize of Bitcoin Cash is 8 MB in stead of 1 MB for Bitcoin, which means that it allows for more transactions within one block and therefore generates more transaction fees for the miners.

Additionally, Bitcoin Cash has no SegWit and will not have a“replace by fee” feature like Bitcoin. However, it will have a replay and wipeout protection, and it offers a way to adjust the proof-of-work difficulty quicker than the normal 2016 block difficulty adjustment interval found in Bitcoin.

We will quickly elaborate on what SegWit,“Replace by fee”, replay- and wipeout protection is below. For more information regarding these topics, please consult Bitcoin Magazine or similar websites.

What is SegWit?

SegWit is the abbreviation for“Segregated Witness” which some people think that this is going to revolutionize Bitcoin, while others do not see the added value and have gone with Bitcoin Cash.

Basically, doubling the amount of transactions in a block will double a number of transactions and that, in turn, will double the amount of signature data that will be inside each of those transactions. However, this would make the transactions even bulkier and increase the transaction amount. Additionally, this opens the gates for malicious parties who may want to spam(DDoS) the blockchain. SegWit resolves this by changing the calculation of the signature hash and make the whole process more efficient as a result.

What is“Replace by Fee”?

The Replace by Fee method allows replacing an already transmitted transaction by transmitting another transaction with a higher fee. This only works on transactions before they are signed by miners(0-confirmations).

Full replacement allows people to update a transaction if it is not being included in the blockchain already(0-confirmations). It would also act to discourage people accepting transactions, until at least one block confirmation happens, since until it is confirmed, it is easy to reverse.

What is Replay Protection?

A replay attack is data transmission that is maliciously repeated or delayed. In the context of a blockchain, it is taking a transaction that happens in one blockchain and maliciously repeating it in another blockchain. Eg. Alice is sending 5 BTC to Bob, under a replay attack she will send him 5 BCH as well, even though she never meant to do that.